The ECB will redefine its inflation target | 08 July 2021

08 July 2021, EUR/USD

The ECB will redefine its inflation target

EURUSD trading plan:

The European Central Bank will announce the outcome of a 18-month strategy review, redefining its inflation target. In a move long flagged by policymakers, the bank is likely to set its inflation target at 2%, ditching its current formulation of “below but close to 2%”, which has created the impression it worried more about price growth above the target than below it. An explicit reference for tolerating an inflation overshoot is likely to be seen by traders as a commitment to keep monetary policy ultra-easy for an even longer period and would be seen as an assurance that 2% is not a cap, as now perceived.

Investment idea: buy 1.1783 and take profit 1.1872.

David Johnson
Analyst of «FreshForex» company
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